MAG Insights

What are card brand releases?

Late in the summer, merchants received notices from their acquirers, gateways, and payment service providers (PSPs) about the October brand release. Nothing can wreak havoc on a P&L or budget like unexpected fee changes. Yet, while fee changes get most of the attention, these quarterly release cycles contain so much more than just changes in fees. The quarterly brand releases often include changes to processing requirements, new or updated data fields and values, compliance program updates, and chargeback rules changes that may target transactions within a specific channel, geography, or merchant segment.

How can these changes affect my business?

Changes to processing requirements and data messages may require updates to POS software or checkout pages which could disrupt a merchant’s planned development cycles. Getting the messages wrong can result in downgraded interchange qualification or added network assessments in the way of transaction or data integrity fees. In some cases, transactions will shift in qualification even without a change to the authorization or settlement message.

Whenever new services or products are offered by the brands, merchants may be required to opt-out of those services if they choose not to participate, and in some instances, merchants are billed for services whether they use them or not. Read the fine print!

New or updated data fields and values often require significant lead times due to the number of stakeholders that must accommodate the change. If the change is an update to an existing data field, it can propagate throughout the ecosystem relatively quickly, but when introducing a new data field, the change often starts with issuer and/or acquirer before mandated merchant support.

How can merchants stay informed?

The card brands formally communicate upcoming changes directly to the parties adjacent to the processing flow, such as issuers, acquirers, and merchants with a direct processing relationship.

Merchants should partner closely with their gateway, PSP, or acquirer to fully understand how the releases impact your landscape. Read all the release communications you receive and share them with your finance, operations, and IT teams. If you partner with multiple acquirers, gateways, or PSPs, you may receive what initially appears as duplicitous notices. Do not dismiss any communication from partners related to upcoming releases. The various partners interpret and disseminate the information differently, and there is much to glean from comparing the various communications. Attend any webinars offered by those partners, as hearing questions that colleagues may ask during those events can also be extremely helpful.

Ask questions about what changes acquirers may be required to support, as this can signal a future later mandate for merchant support. Leverage your quarterly business reviews and dedicate time to understanding what they know about the upcoming changes to the industry.

There isn’t a formal communication channel between every card brand and merchants, so do not hesitate to ask your card brand relationship managers about what to expect. Updated rules and interchange fees will be published after the changes take effect, although productively managing your business requires advance notice of these changes. Whenever the MAG is made aware of a change, and given permission, notices are posted on our MAG Learning Center (MLC). We will continue to advocate for transparency in the release process.

We often learn of changes through merchant discussions in our Collaboration Committee. We meet directly with the card brands to gain a better understanding of the requirements and impacts. This year alone we have held eight merchant feedback sessions with multiple card brands, whereby merchants provided direct feedback on upcoming changes to processing, programs, and services. Through these sessions, we often see modifications to accommodate merchants’ needs.

If you are interested in joining the Collaboration Committee or want to learn more about what we do, please reach out to Kelly Andrus directly.